JUDGMENT SHEET

IN THE ISLAMABAD HIGH COURT, ISLAMABAD

JUDICIAL DEPARTMENT

Execution Application No.09 of 2019

China International Water & Electric Corporation (CWE) P.R. China
Versus
National Highway Authority
Date of Hearing: 13.09.2023
Applicant by: M/s Javaid Akhtar, Zakir Hussain Baig and
Hamid Nawaz, Advocates.
Respondent by: Mr. Rizwan Faiz Muhammad, Advocate and
Barrister Afzal Khan Shinwari.
Assistance by: Barrister M. Usama Rauf, Law Clerk.
_____________________________________________________________________

MIANGUL HASSAN AURANGZEB, J:- Through this judgment we

propose to decide the following cases:-
(i) Application (numbered and registered as Execution Petition
No.09/2019) under Section 6 of the Recognition and Enforcement
(Arbitration Agreements and Foreign Arbitral Awards) Act, 2011
(“the 2011 Act”), filed by China International Water and Electric
Corporation (CWE) P.R. China (“CWE”), seeking recognition and
enforcement of foreign arbitral award dated 30.06.2019 rendered
by Mr. Peter H. J. Chapman of Somersby House Chambers (“the
Arbitrator”) and approved by the International Court of Arbitration
of the International Chamber of Commerce (“ICC”).
(ii) Appeal (First Appeal against Order (“FAO”) No.94/2021) filed by
National Highway Authority (“NHA”) challenging the order dated
21.05.2021 passed by the Court of the learned Additional District
Judge, Islamabad (“District Court, Islamabad”) whereby NHA‟s
application under Sections 30 and 33 of the Arbitration Act, 1940
(“the 1940 Act”) for setting aside and remitting the foreign arbitral
award dated 30.06.2019 was dismissed with costs.
(iii) Appeal (Regular First Appeal (“RFA”) No.881/2021) filed by CWE
challenging the judgment and decree dated 17.11.2021 passed by
the District Court, Islamabad whereby CWE‟s suit for declaration,
cancellation and return of guarantee and permanent injunction
filed against NHA was dismissed.
 2 Execution Application No.9/2019

2. The record shows that on 03.12.2009, NHA and CWE entered into
a contract for the construction of Four Lane Faisalabad – Khanewal
Project (M4), Package-1: Faisalabad – Gojra Section (58 KM) (“the
Contract”). The contract price was Rs.10,305,078,335.09, and the
contract period was 36 months from the commencement date i.e.
25.02.2010. The time for the completion of the works was extended on
three occasions and the works were completed on 29.01.2015 with the
defects liability period expiring on 29.01.2016. The Contract between
the parties was based on the Standard Bidding Document – Multilateral
Development Banks Version 2006 published by Fédération
Internationale Des Ingénieurs-Conseils (“FIDIC”) and commonly
referred to as the „Pink Book.‟ The contract documents included the
General Conditions of Contract (“GCC”) and Particular Conditions of
Contract (“PCC”).
3. The dispute resolution mechanism provided in the Contract
envisaged a process for disputes arising from and related to the
Contract to be amicably settled between the parties, failing which the
disputes could be referred to a Dispute Board. The party aggrieved by
the decision of the Dispute Board could give notice of dissatisfaction to
the other party and thereafter refer the matter to arbitration pursuant to
the Rules of Arbitration of the International Chamber of Commerce
(“ICC Rules”).
4. Clause 8.4 of the GCC entitled a contractor to an extension of the
time for completion (“EOT”) where the delay is on account of the causes
mentioned in the said clause. All these causes are such as are beyond
the control of the contractor. If the contractor considers himself entitled
to an EOT, he is required to give a notice to the Engineer, who is to
determine each EOT. Where the contractor considers himself to be
entitled to an EOT and/or any additional payment, clause 20.1 of the
GCC requires him to give notice to the Engineer describing the event or
circumstance giving rise to the claim. Such notice is to be given as soon
as practicable, and not later than 28 days after the contractor became
aware, or should have become aware, of the event or circumstance.
Within 42 days after the contractor becomes aware or should have
become aware of the event, or circumstance giving rise to the claim, he
 3 Execution Application No.9/2019

is required to send to the Engineer a fully detailed claim which includes

full supporting particulars of the grounds of the claim and for the
extension of time etc. For the purposes of clarity, clause 20.1 of the
GCC reads thus:-
“If the Contractor considers himself to be entitled to any extension of
the Time for Completion and/or any additional payment, under any
Clause of these Conditions or otherwise in connection with the
Contract, the Contractor shall give notice to the Engineer, describing
the event or circumstance giving rise to the claim. The notice shall be
given as soon as practicable, and not later than 28 days after the
Contractor became aware or should have become aware, of the event
or circumstance.
If the Contractor fails to give notice of a claim within such period of 28
days, the Time for Completion shall not be extended, the Contractor
shall not be entitled to additional payment, and the Employer shall be
discharged from all liability in connection with the claim.”

5. It is an admitted position that by virtue of EOT-1, EOT-2 and EOT-

3, the time for completion was extended respectively to 31.12.2013,
15.06.2014 and 31.01.2015. NHA had supported the award of these time
extensions to CWE and the Contract was completed within the extended
time for completion. NHA however resisted accepting that such time
extensions could result in an award of idle time costs and prolongation
costs in CWE‟s favour.
Extension of Time – 1:-
6. With respect to CWE‟s claim for costs associated with EOT-1, the
Dispute Board by a majority of two to one decided on 19.05.2014 to
award Rs.744,068,695/- along with interest at the rate of 6% per annum.
The minority view was that CWE should only be paid Rs.338,000,000/-.
NHA, on 12.06.2014, gave a notice of its dissatisfaction with the Dispute
Board‟s decision. What a notice of dissatisfaction does is to give the
party dissatisfied with the Dispute Board‟s decision the ability to
challenge it on merits in arbitration or have it reviewed in the process of
an amicable settlement.
7. NHA, vide letter dated 28.11.2014, expressed its intention to
partially implement the Dispute Board‟s said decision by paying
Rs.338,000,000/- and required CWE to furnish a bank guarantee to
secure re-payment of the said amount. On 31.12.2014, NHA paid
Rs.338,000,000/- to CWE and on 06.01.2015 CWE furnished bank
guarantee No.IGT087400000315 issued by Habib Bank Limited for the
 4 Execution Application No.9/2019

amount of Rs.338,000,000/- in favour of NHA. This guarantee is still valid

and subsisting.
8. At no material stage was the balance amount of Rs.406,068,695/-
under the Dispute Board‟s decision dated 19.05.2014 paid by NHA to
CWE. CWE had submitted a request for arbitration on 13.04.2015 to the
Secretariat of the International Court of Arbitration of the ICC. The
Arbitrator was appointed on 24.06.2015 pursuant to Article 13(2) of the
ICC Rules. One of the pleas taken by CWE in the arbitration was that the
guarantee was liable to be discharged since there was no legal infirmity
with the Dispute Board‟s decision to award Rs.744,068,695/- against
CWE‟s claim for costs associated with EOT-1.
9. The Arbitrator, in his final award dated 30.06.2019, concurred
with the majority decision of the Dispute Board on CWE‟s claim for
costs associated with EOT-1. As per the said award, after deducting
Rs.338,000,000/- (which had already been paid to CWE on 31.12.2014),
an amount of Rs.522,285,555.50 inclusive of tax and interest at the rate
of 6% per annum from 01.01.2015 to 30.06.2019 was awarded in CWE‟s
favour as its claim for costs associated with EOT-1. The interest
calculated by the Arbitrator payable for the period from 01.01.2015 up
to the date of the award, i.e. 30.06.2019, was Rs.109,638,547.65. The
Arbitrator also declared that the sum of Rs.338,000,000/- paid to CWE
on 31.12.2014 was to be treated as the final and unconditional payment.
On this basis, the Arbitrator ordered that the bank guarantee was to be
returned by NHA to CWE without any condition and the bank furnishing
the guarantee was to be released from all obligations thereunder.
10. Since NHA had required CWE to furnish a bank guarantee for an
amount of Rs.338,000,000/-, and since CWE had incurred costs in
providing the bank guarantee, the Arbitrator took the view that CWE
was entitled to such costs along with withholding tax and interest. The
costs incurred for furnishing and revalidating the bank guarantee for
the period between 01.01.2015 and 30.06.2019 was determined to be
US Dollars 7,920 and withholding tax and interest came to US Dollars
475 and US Dollars 2,308, respectively. In this way the total amount
payable by NHA for the said period came to US Dollars 10,703.88.
 5 Execution Application No.9/2019

Extension of Time – 2:-

11. As a result of EOT-2‟s approval by NHA on 14.03.2014, the time
for completion was extended to 15.06.2014. On CWE‟s claim for costs
associated with EOT-2, the Dispute Board on 16.06.2015 decided that
CWE was entitled to receive payments in connection with EOT-2 and
that such costs were to be determined by the Engineer. NHA did not
issue a notice of dissatisfaction with respect to the said decision of the
Dispute Board and therefore the said decision became binding on the
parties. The Engineer assessed CWE‟s costs claim associated with
EOT-2 at nil. Thereafter, CWE again referred its claim regarding costs
associated with EOT-2 to the Dispute Board. The Dispute Board, in its
decision dated 02.02.2016, had held that the entitlement of CWE to
receive payment of delay cost claim related to EOT-2 had already been
established by the Dispute Board in its decision taken on 16.06.2015.
The Dispute Board required the Engineer to determine the quantum of
the additional costs to which CWE was entitled as a result of EOT-2 by
adopting the following methodology:-
“(a) the time extended under EOT #2
(b) the level of resources (e.g. Local/foreign manpower, plant,
equipment etc) deployed by the Contractor at site during the
above stated period as already certified by the Engineer in his
Monthly Progress Reports to the NHA.
(c) the unit costs of the above deployed resources as had been
adopted by the Engineer in his determination of Additional Costs
related to EOT #1 to verify the amounts claimed by the Contractor
under the heads of:
(i) Owning Cost of Contractor‟s Equipment
(ii) Salary for Site Expatriate Staff
(iii) Salary for Local Staff & Labour
(iv) Management Cost”
12. The Dispute Board took the view that the Engineer ought to have
adopted the same methodology as he had used in assessing CWE‟s
costs claim associated with EOT-1. Apparently, the Engineer once
again assessed CWE‟s costs claim associated with EOT-2 at nil. CWE‟s
claim before the Arbitrator included its claim for costs associated with
EOT-2. The Arbitrator placed himself in the position of the Engineer and
assessed CWE‟s costs claim associated with EOT-2. The amount
originally claimed by CWE in its pleadings was Rs.979,534,252/- without
interest. The period of EOT-2 was 165 days i.e. between 01.01.2014 and
15.06.2014. The Arbitrator assessed CWE‟s claim under the heads of
 6 Execution Application No.9/2019

prolonged equipment, expatriate staff salaries, local staff and labour,

management costs and insurance and awarded an amount of
Rs.951,172,427.50 in CWE‟s favour. This amount was inclusive of tax
and along with interest at the rate of 6% per annum from 01.09.2015 to
30.06.2019 it came to Rs.1,183,068,265.32.
Extension of Time – 3:-
13. As regards EOT-3, which was for a period of 230 days, the Dispute
Board in its decision dated 19.12.2015 had decided that CWE was
entitled to receive payment of delay costs claim related to EOT-3 and
that the amount of such claim was to be determined by the Engineer
and be recommended to NHA for payment. NHA had not issued a notice
of dissatisfaction with respect to the said decision, and therefore the
same was final and binding on the parties. The Engineer had not
assessed CWE‟s claim associated with EOT-3 within 28 days of the
Dispute Board‟s said decision. The Engineer‟s belief was that the grant
of EOT-3 did not entitle CWE to any costs associated with EOT-3.
14. The Arbitrator took the view that the assessment of CWE‟s claim
associated with EOT-3 had to be determined by adopting the same
methodology as was used for EOT-1. By adopting this methodology, the
Arbitrator awarded a cumulative amount of Rs.1,178,318,536.66
against CWA‟s claim of Rs.1,406,629,134/- under the heads of
prolonged equipment, expatriate staff salaries, local staff and labour,
management costs, and insurance. This amount, inclusive of tax along
with interest at the rate of 6% per annum from 01.03.2016 to
30.06.2019, came to Rs.1,428,122,066.43.
Retention Money:-
15. CWE had also made a claim for the release of retention money
amounting to Rs.237,248,179.30. CWE based this claim on clause 14.9
of the GCC which provides inter alia that promptly after the latest of the
expiry dates of the defects notification period, the outstanding balance
of the retention money shall be certified by the Engineer for payment to
the contractor.
16. The defects notification period with respect to the Contract
expired in February 2016. Therefore, in terms of clause 14.9, NHA could
not have withheld the retention money beyond February 2016. The
withholding of the said amount by NHA resulted in the imposition of
 7 Execution Application No.9/2019

withholding tax. This resulted in the enhancement of the amount

payable by NHA to be Rs.251,483,070.06. Not just that, CWE was also to
be paid interest at the rate of 6% per annum on the said amount. This is
because clause 14.8 of the PCC provides inter alia that in the event of
the failure of the employer to make payments within the times stated in
the Contract, the employer shall pay to the contractor simple interest at
the rate of 6% per annum upon all sums unpaid from the date upon
which the same should have been paid. The Arbitrator considered the
said rate of interest on late payments to be reasonable and acceptable.
The Arbitrator accordingly held that the interest due on
Rs.251,483,070.06 for the period between 01.03.2016 (when the
retention money should have been released) and 30.06.2019 (the date
of the final award) to be Rs.50,296,614.01. This makes the total amount
of the retention money including withholding tax and interest at the rate
of 6% per annum from 01.03.2016 to 30.06.2019 payable to CWE to be
Rs.301,779,684.07.
Costs of arbitration:-
17. As CWE‟s costs for arbitration, the Arbitrator has awarded GB
Pounds 657,704.75 (inclusive of interest at the rate of 1.25% from
31.12.2016 to the date of final award). Additionally, the ICC Court had
fixed US Dollars 303,500 as the costs of arbitration which was paid in
equal shares by the contesting parties. The Arbitrator entitled CWE to
be paid its share of US Dollars 151,750 by NHA. The Arbitrator awarded
simple interest of US Dollars 9,958.59 on US Dollars 151,750 at the rate
of 1.75% per annum from 01.10.2015 to the date of the final award. This
made the total amount payable by NHA as the cost of arbitration to be
US Dollars 161,708.59. The Arbitrator also awarded Rs.2,160,000/-
inclusive of interest at the rate of 5% per annum from 01.12.2016 till the
date of the final award on account of CWE‟s legal costs incurred in
Pakistan.
18. The Arbitrator had required that all payments from NHA to CWE
would be made not later than 30.06.2019. Now, CWE had also sought
post-award interest at the rate of 12% per annum. The Arbitrator held
that interest accruing between the date of the final award and any
decree of the Court authorizing payment shall be considered as post-
award interest and shall run from the date of the final award and
 8 Execution Application No.9/2019

continue until all payments of the unpaid sum have been paid. The rate
of interest was set at 6% per annum so as to encourage prompt
payment of the amounts due under the final award.
19. In short, the arbitration proceedings culminated in the award
dated 30.06.2019 declaring that NHA was responsible for the delays in
the execution of the Contract; CWE was entitled to delay costs claim in
respect of EOT-1 in the sum of Rs.522,285,555.50; EOT-2 in the sum of
Rs.1,183,068,265.32; and EOT-3 in the sum of Rs.1,428,122,066.43.; the
payment of Rs.338,000,000/- that had been made by NHA to CWE on
31.12.2014 was to be treated as the final and unconditional payment;
the Dispute Board‟s decisions requiring the Engineer to determine and
assess CWE‟s claim for costs associated with EOT-2 and EOT-3 by
adopting the same methodology as was used for determining and
assessing CWE‟s claim for costs associated with EOT-1 are final and
binding; and that the defects liability period expired on 29.01.2016. The
Arbitrator turned down CWE‟s claim for an amended bill of quantity rate
for Asphaltic Base Course Plant (ABCP).
20. As mentioned above, the award was rendered on 30.06.2019. Vide
letter dated 15.07.2019, CWE provided a copy of the said award to the
Chairman, NHA with the request to make payment in accordance with
the award and to return the bank guarantee. NHA neither made any
payment to CWE nor returned the bank guarantee. Instead, NHA filed
an appeal for the annulment of the award before the Cour‟ D Appel De
Paris (“Court of Appeal, Paris”). This appeal was dismissed on
14.09.2021. Perusal of the English translation of the judgment
dismissing NHA‟s challenge to the said award shows that NHA had
sought the annulment of the award on the ground that the Arbitral
Tribunal was irregularly constituted. NHA had alleged that the
Arbitrator had links with a company called Sinohydro which was an
undeclared sub-contractor of CWE. NHA questioned the independence
and impartiality of the Arbitrator on the ground of lack of disclosure as
to such link. It was also asserted by NHA that Mr. Chapman had been
appointed as a member of the Dispute Board on 04.04.2016 in a dispute
between Sinohydro and Water and Power Development Authority, and
that CWE would have had recourse to Sinohydro as its sub-contractor
in the dispute referred to Mr. Chapman as an Arbitrator. The Court of
 9 Execution Application No.9/2019

Appeal, Paris held that the grounds taken by NHA in its appeal were
insufficient to demonstrate any bias on the part of the Arbitrator.
21. Further perusal of the judgment dated 14.09.2021 passed by the
Court of Appeal, Paris shows that under cover of the plea as to the lack
of impartiality of the Arbitrator, NHA in fact asked the said Court to
review the merits of the final award. NHA was not allowed to do so and
its appeal was dismissed with costs of Euros 100,000. There is nothing
on the record to show that the said judgment had been assailed any
further by NHA.
22. While the proceedings before the Court of Appeal, Paris were
pending, NHA filed an application under Sections 30 and 33 of the 1940
Act before the Court of Civil Judge, Islamabad praying for the award
dated 30.06.2019 to be set-aside. The primary ground agitated by the
NHA for setting aside the award was that the Arbitrator had committed
misconduct by not disclosing his association with Sinohydro which had
been one of CWE‟s sub-contractors. NHA alleged bias against the
Arbitrator and also took a spate of other grounds in an effort to avoid its
obligation to make payment in terms of the award to CWE. It is pertinent
to bear in mind that NHA, in its application, did not mention the fact as
to the filing of the appeal against the award before the Court of Appeal,
Paris.
23. Vide order dated 29.01.2021, the learned Civil Court returned the
said application so that it could be filed before the Court of competent
jurisdiction. As per the said order the High Court, in terms of the
provisions of the 2011 Act, had the exclusive jurisdiction to adjudicate
upon the application filed by NHA. Furthermore, it was held that the
application could not be entertained as it was beyond the pecuniary
jurisdiction of the Civil Court.
24. After the application was returned NHA, on 28.04.2021, filed the
very same application before the District Court, Islamabad. Vide order
dated 21.05.2021, the District Court, Islamabad dismissed the said
application with costs of Rs.1,000,000/-. The said Court also held that in
terms of Sections 2(d) and 3(1) of the 2011 Act, the High Court had the
exclusive jurisdiction to adjudicate upon NHA‟s application. The said
order dated 21.05.2021 has been assailed by NHA before this Court in
an appeal (FAO No.94/2021).
 10 Execution Application No.9/2019

25. On 21.12.2019, CWE filed execution application No.09/2019

before this Court under Section 6 of the 2011 Act praying for the
enforcement of the award dated 30.06.2019. CWE had also sought the
attachment and sale of NHA‟s properties listed in paragraph 10(10) of
the said application as well as a direction to the NHA to cancel and
return the bank guarantee. CWE had also sought costs under Section
35 of the Code of Civil Procedure, 1908 (“C.P.C.”) as amended by the
Costs of Litigation Act, 2017.
26. Through application (CM No.408/2021), CWE sought an
amendment in the prayer clause of execution application No.09/2019 so
as to also seek the recognition of the award dated 30.06.2019. After this
Court, vide order dated 29.09.2021, allowed the said application, an
amended execution application was filed by CWE. NHA has filed
objections to the said execution application. The contesting parties in
support of their oral submissions also filed written arguments.
27. Since CWE apprehended that despite the award dated 30.06.2019
NHA would encash the bank guarantee, it filed a suit for declaration and
cancellation of the bank guarantee before the Court of the Senior Civil
Judge, Islamabad. Vide order dated 11.01.2021, the learned Civil Court
returned the plaint in the said suit due to lack of pecuniary jurisdiction.
On 19.01.2021, CWE filed the very same suit before the District Court,
Islamabad. This suit was dismissed vide judgment and decree dated
17.11.2021 on the same grounds on which NHA‟s application under
Sections 30 and 33 of the 1940 Act had been dismissed. In the said
judgment and decree, it was mentioned that CWE had already filed
execution application No.09/2019 before this Court in which the
cancellation and return of the bank guarantee had also been sought.
The said judgment and decree have been assailed by CWE in appeal
(RFA No.881/2021) before this Court.
28. Soon after the said judgment and decree was passed by the
District Court, Islamabad, CWE filed an application (CM No.1277/2021 in
execution petition No.09/2019) before this Court praying for an interim
injunction to restrain NHA from encashing the bank guarantee dated
06.01.2015. Vide order dated 21.06.2023, this Court restrained NHA
from encashing the said guarantee until a decision in execution petition
 11 Execution Application No.9/2019

No.09/2019. This order was passed after the learned counsel for CWE
submitted that the said guarantee is valid till the end of this year.
29. Learned counsel for CWE, after narrating the relevant
background facts, submitted that a Court subordinate to the High Court
did not have the jurisdiction to set-aside a foreign arbitral award; that
by virtue of Section 3(1) of the 2011 Act, the High Court has the
exclusive jurisdiction to adjudicate and settle matters relating to or
arising from the said Act; that the Hon‟ble Lahore High Court in the case
of Orient Power Company (Private) Limited Vs. Sui Northern Gas
Pipeline Limited (PLD 2019 Lahore 607) held that the 2011 Act leaves no
room for interpretation on the issue of exclusivity of jurisdiction of the
High Court; that in the case of Taisei Corporation Vs. A.M. Corporation
Company (Private) Limited (2018 MLD 2058), the Hon‟ble High Court of
Sindh has held that after the enactment of the 2011 Act, all foreign
awards have to sail through the waters of the said Act; that the High
Court can refuse to recognize and enforce a foreign arbitral award only
if the grounds set out in Article V of the United Nations Convention on
the Recognition and Enforcement of Foreign Arbitral Awards, 1958
(“the NY Convention”) read with Section 7 of the 2011 Act are satisfied,
but does not have the jurisdiction to set-aside such an award; that in
terms of Article V(1)(e) of the NY Convention, an award can be set-aside
by the Courts of the country where the award was made or under the
specifically agreed procedural law of another country; that since the
seat of arbitration was Paris, it was the French law which is to be
treated as the procedural law governing the conduct of the arbitration
proceedings; that it is an admitted position that the contesting parties
had agreed for the laws of Pakistan to be the substantive law governing
the contract but had not agreed for the laws of Pakistan to be the
procedural law of the arbitration; that since the award dated 30.06.2019
was made at Paris under the ICC Rules, NHA had filed an appeal to set-
aside the said award before the Court of Appeal, Paris but the appeal
was rejected with costs of Euros 100,000, which have till date not been
paid by NHA; that the re-agitation by NHA of the grounds for setting
aside the award before Courts in Pakistan is barred under the principle
of res judicata; that the District Court, Islamabad had also dismissed
NHA‟s challenge to the said award with costs of Rs.1,000,000/- which
 12 Execution Application No.9/2019

have also not been paid by NHA; and that for NHA to allege bias against
the Arbitrator after the award has been rendered is indicative of NHA‟s
lack of good faith.
30. Learned counsel for CWE further submitted that NHA has
embroiled CWE in wasteful litigation since the past eight years; that in
CWE‟s favour decisions have been made by the Engineer, Dispute
Board as well as the Arbitrator but NHA is refusing to honour any of the
said decisions; that the total amount payable under the award dated
30.06.2019 comes to Rs.3,435,255,571.32, US Dollars 10,703.88, and
GB Pounds 657,704.75 plus US Dollars 161,708.59 as costs of the
arbitration and Rs.2,160,000/- in respect of legal fees incurred in
Pakistan; that there is no reason for NHA to continue holding bank
guarantee dated 06.01.2015 for an amount of Rs.338,000,000/-; and that
with every passing day that NHA withholds the amounts due and
payable to CWE under the said award, the fiscal liability of NHA is
increasing. Learned counsel prayed for the award dated 30.06.2019 to
be recognized and enforced and for FAO No.94/2021 filed by NHA to be
dismissed.
31. On the other hand, learned counsel for NHA submitted that the
execution petition is not maintainable in its present form since no
executable decree has been issued; that CWE does not have the status
of a decree holder; that this Court ought to either dismiss the execution
petition or adjourn it sine die until a decree has been issued; that unless
a Court proceeds to pronounce judgment according to the award and
upon the judgment so pronounced a decree is issued, enforcement
proceedings cannot be initiated; that this procedure is to be followed
for domestic as well as foreign awards; that it is only when an award is
made a rule of Court that it becomes capable of execution; that Section
6(1) of the 2011 Act requires the Court to recognize and enforce an
award in the same manner as a judgment or an order of a Court in
Pakistan; that Section 3(3)(a) of the said Act requires the Court to follow
the provisions of the Code of Civil Procedure, 1908 (“C.P.C.”); that the
provisions of C.P.C. for enforcing a judgment would apply when a
decree is issued; that under Section 44(a) of C.P.C., a judgment of a
foreign Court based on an arbitration award cannot be enforced; and
 13 Execution Application No.9/2019

that initially CWE had not even prayed for the award dated 30.06.2019
to be recognized.
32. Learned counsel for NHA further submitted that this Court, while
exercising jurisdiction under the 2011 Act, can either recognize and
enforce a foreign award or refuse to do so but cannot set-aside an
award; that the recognition and enforcement of an award can be
refused by a High Court without formally setting aside an award; that
this Court will refuse to recognize and enforce an award which has
been set-aside by a competent authority of the country or under the law
of which the award is made; that the NY Convention permits domestic
Courts to apply their own municipal laws when dealing with challenges
to foreign awards on the ground of illegalities or errors in the award;
that Courts in different jurisdictions have held that the NY Convention
does not apply to setting aside of arbitral awards; that admittedly the
governing law of the contract between NHA and CWE was the law of
Pakistan; that even though the seat of arbitration was Paris, France, the
law governing the contract between the parties was the law of Pakistan,
and therefore NHA could apply to Courts in Pakistan for the setting
aside of the award dated 30.06.2019 in accordance with the municipal
laws of Pakistan; that the said award is not enforceable under Section 7
of the 2011 Act read with Article V(1)(d) and (e) of the NY Convention for
the reason that the procedure adopted during the arbitration
proceedings was not in accordance with the laws of Pakistan which
governed the agreement between the parties; that NHA, in addition to
opposing CWE‟s petition seeking recognition and enforcement of the
award, can also seek the setting aside of the award in accordance with
the provisions of the 1940 Act; that for the setting aside of the award
under the provisions of the 1940 Act, NHA correctly invoked the
jurisdiction of the District Court, Islamabad by filing an application
under Sections 30 and 33 of the 1940 Act; that the District Court,
Islamabad ought to have given a finding on the merits of NHA‟s
objections and challenges to the award dated 30.06.2019; that this
Court ought to set-aside the order dated 21.05.2021 passed by the
District Court, Islamabad and remand the matter with the direction that
NHA‟s objections and challenges to the said award be decided on
merits; that until such a decision is made by the District Court,
 14 Execution Application No.9/2019

Islamabad, this Court ought not to proceed with the execution petition
filed by CWE; and that alternatively, this Court ought to decide NHA‟s
objections since it has been vested with the powers of a Civil Court.
33. Learned counsel for NHA had submitted written arguments which
are in the nature of an appeal against the award in that NHA has
challenged the findings of the Arbitrator on the merits of CWE‟s
monetary claim. Learned counsel for NHA prayed for the execution
petition filed by CWE to be dismissed and for FAO No.94/2021 to be
allowed.
34. We have heard the contentions of the learned counsel for the
contesting parties. The facts leading to the filing of the instant petition
have been set out in sufficient detail in paragraphs 2 to 28 above and
need not be recapitulated.

Whether a foreign arbitral award can be challenged before Courts in

Pakistan:-
35. We propose, in the first instance, to decide whether a challenge
could be thrown by NHA to the award dated 30.06.2019 rendered in
arbitration seated in Paris, France before Courts in Pakistan by filing an
application under Sections 30 and 33 of the 1940 Act. NHA asserts that
since the Contract was governed by Pakistan law, and since Article
V(1)(e) of the NY Convention permits a party to seek the setting aside of
a foreign arbitral award before the courts of the country under the law
of which the award is made, it is the Courts of this country before which
NHA could apply for the setting aside of the award.
36. Article V(1)(e) provides that recognition and enforcement of the
award may be refused, at the request of the party against whom it is
invoked, only if that party furnishes to the competent authority where
the recognition and enforcement is sought, proof that “the award has
not yet become binding on the parties, or has been set-aside or
suspended by a competent authority of the country in which, or under
the law of which, that award was made.”
37. There is a difference between (i) the proper or substantive law
governing a contract; (ii) the proper or substantive law governing the
arbitration agreement whether embedded in the underlying contract or
not; and (iii) the curial law governing the conduct of the arbitration.
Parties have freedom to agree on the substantive law governing the
 15 Execution Application No.9/2019

contract; the substantive law governing the arbitration agreement; and

the curial law applicable to the arbitration proceedings. Recently, the
United Kingdom Supreme Court in the case of Enka Insaat Ve Sanayi AS
Vs. OOO Insurance Company Chubb [2020] UKSC 38, held as follows:-
“Where an international commercial contract contains an agreement to
resolve disputes by arbitration, at least three systems of national law
are engaged when a dispute occurs. They are: the law governing the
substance of the dispute; the law governing the agreement to arbitrate;
and the law governing the arbitration process. The law governing the
substance of the dispute is generally the law applicable to the contract
from which the dispute has arisen. The law governing the arbitration
process (sometimes referred to as the “curial law”) is generally the law
of the “seat” of the arbitration, which is usually the place chosen for the
arbitration in the arbitration agreement. These two systems of law may
differ from each other. Each may also differ from the law which governs
the validity and scope of the arbitration agreement.”

38. The law governing the contract which creates the substantive
rights of the parties in respect of which the dispute has arisen is called
the proper law of the contract.
39. It is well settled that an arbitration agreement, which creates
rights and obligations of the parties to submit disputes to arbitration
and to abide by the award, is an agreement severable from the
substantive contract in which it is embedded. It is also capable of
surviving the termination, repudiation and frustration of the substantive
contract. Since an arbitration agreement is considered to have a
distinct life of its own, it can be governed by a proper law of its own
which need not be the same as the law governing the substantive
contract. Where there is no express choice of law governing the
arbitration agreement, the presumption would be that the parties
intended for the law chosen to govern the substantive contract to be the
law governing the arbitration agreement. The proper law of the
arbitration agreement governs the obligation of the parties to submit
the disputes to arbitration, and to honour an award. This must be
distinguished from the curial law of the arbitration, which governs the
conduct of the individual reference.
40. The procedural law of an arbitration which is also called „lex
arbitri‟ or „curial law‟ deals with a range of issues including the form
and validity of the arbitral award; and the finality of the award, including
any right to challenge the award in the Courts of the place of
arbitration. In order to determine the curial law in the absence of an
 16 Execution Application No.9/2019

express choice by the parties, it is first necessary to determine the seat

of arbitration. This is because where the parties do not choose the
curial law, the law of the seat of arbitration would be the curial law
which governs the arbitration proceedings. The seat of arbitration is a
location selected by the parties as the legal place of arbitration, which
consequently determines the procedural framework of the arbitration.
Contracting parties have the freedom to agree on the seat of
arbitration. Where parties make no such agreement, the seat may be
determined by the arbitral tribunal or the administering arbitral
institution in accordance with and subject to the arbitration rules
chosen by the parties. Where this is also not done the place where the
arbitration is conducted is the seat of arbitration.
41. In the case of Hitachi Limited Vs. Rupali Polyester (1998 SCMR
1618), one of the principles deduced by the Hon‟ble Supreme Court
from treatises on the subject of international commercial arbitration
was that it is for the parties not only to choose the law which is to
govern their agreement to arbitrate, but also the law which is to govern
the arbitration proceedings, and that if the parties fail to choose the law
governing the arbitration proceedings, those proceedings will almost
certainly be governed by the law of the country in which the arbitration
is held. Another principle deduced was that the procedural law of
arbitration will determine what judicial remedies are available to a party
who wishes to challenge the award once it has been rendered and
before it is sought to be enforced abroad.
42. Clause 1.4 of the GCC provides that the Contract shall be
governed by the law of the country or other jurisdiction stated in the
Contract Data. Section 8 of the PCC contains the Contract Data
according to which the governing law of the Contract is the law of the
Islamic Republic of Pakistan (“Pakistan law”). So the substantive law
governing the Contract is Pakistan law. But there is no provision either
in the GCC or the PCC providing for the law governing the arbitration
agreement. Therefore, the law governing the arbitration agreement
would be the law governing the Contract which contains the arbitration
clause. Since the governing law of the Contract was Pakistan law, this
would also be the law governing the arbitration agreement. In the case
of Hitachi Limited Vs. Rupali Polyester (1998 SCMR 1618), it was also
 17 Execution Application No.9/2019

held that “in the absence of any contrary express agreement, the
proper law of arbitration agreement will be the same which is
applicable to the main agreement.” One of the principles summarized
by the Supreme Court of the United Kingdom in the case of Enka Insaat
Ve Sanayi AS Vs. OOO Insurance Company Chubb [2020] UKSC 38 was
that “where the law applicable to the arbitration agreement is not
specified, a choice of governing law for the contract will generally apply
to an arbitration agreement which forms part of the contract.”
43. As regards the curial law or the procedural law of the arbitration,
the parties are at liberty to choose the same. In the case at hand, since
the parties did not choose the curial law, the law of the seat of
arbitration would be the curial law. This makes it all the more necessary
to determine the seat of arbitration. According to Redfern and Hunter
on International Arbitration (Sixth Edition), the law of the seat of
arbitration is normally the law of the place of arbitration, and that in an
international arbitration, the parties usually have no connection with the
seat of arbitration. In the case of Naviera Amazonica Peruana S.A. v
Compania International de Seguros del Peru [1988] 1 Lloyd‟s Rep 116,
Kerr LJ regarded an agreement for arbitration in London as being a
colloquial choice of seat. The case of Enercon GmbH Vs. Enercon India
Ltd [2012] 1 Lloyds Rep 519 concerned an arbitration clause which
provided that the venue of the arbitration proceedings shall be London
and that the provisions of the Indian Arbitration and Conciliation Act,
1996 shall apply. Eder J. held the seat of arbitration to be London. In the
case of Shashoua Vs. Sharma [2009] EWHC 957, the England and Wales
High Court of Justice (Queen‟s Bench Division), it has been held inter
alia that where an arbitration clause provides for arbitration to be
conducted in accordance with Rules of the ICC, a provision that the
venue of arbitration shall be London, United Kingdom amounts to the
designation of a juridical seat. In paragraph 34 of the said report, it has
also been held as follows:-
“When therefore there is an express designation of the arbitration
venue as London and there is no designation of any alternative place as
the seat, combined with a supranational body of rules governing the
arbitration and no other significant contrary indicia, the inexorable
conclusion is, to my mind, that London is the juridical seat and English
law is the curial law”
 18 Execution Application No.9/2019

44. Clause 20.6 of the GCC provides that disputes not amicably
settled and in respect of which the Dispute Board‟s decision, if any, has
not become final and binding shall be settled by arbitration. Clause 20.6
of the PCC provides that in case of a foreign contractor, arbitration
shall be carried out in accordance with the ICC Rules. For the purposes
of clarity, the said clause is reproduced herein below:-
“All disputes arising in connection with the Contract shall be finally
settled by arbitration. In case of foreign contractor, arbitration shall be
carried out in accordance with the Rules of Arbitration of the
International Chamber of Commerce, and in the case of domestic
contractor, arbitration shall be carried out in accordance with the rules
and provision of Arbitration Act, 1940 of Islamic Republic of Pakistan.”

45. As per clause 20.6(b) of the GCC, the place of arbitration shall be
the city where the headquarters of the appointed arbitral institution are
located. The headquarters of the Court of Arbitration of the ICC are
located in Paris, France, and that is indeed where the arbitration was
conducted. Article 18(1) of the ICC Rules provides that the place of the
arbitration shall be fixed by the Court of Arbitration of the ICC unless
agreed upon by the parties. The dispute resolution clauses in the
Contract do not contain a stipulation as to the seat of arbitration, but
since the venue of the arbitration was Paris, France that would also be
seat of arbitration.
46. Although NHA has been selective in placing the procedural orders
on the record, Procedural Order No.1 dated 18.10.2015 shows that
Paris, France was determined as the place of arbitration. Be that as it
may, since NHA, in its comments and written arguments, has stated
with clarity that Paris, France was the seat of arbitration, we shall
proceed further with the case treating Paris, France as the seat of
arbitration. We must however say that in the absence of an express
agreement regarding the seat of arbitration, the presumption is that the
parties intended the seat of arbitration to be the place where the
arbitration was conducted, i.e. Paris, France, and therefore, the curial
law or lex arbitri applicable to the arbitration proceedings would be
French Law. Paris, France has no connection either with CWE (which is
a company incorporated under the laws of the People‟s Republic of
China) or NHA (which is a statutory authority in Pakistan). This would
 19 Execution Application No.9/2019

make Paris, France truly a neutral seat of arbitration for the said
parties.
47. The parties do not dispute that a party aggrieved by an award can
seek its setting aside in terms of Article V(1)(e) of the NY Convention
before the Courts of the country where the arbitration took place. And it
is for this very reason that NHA applied to the Court of Appeal, Paris for
the setting aside of the said award. Regardless of the fact that NHA‟s
appeal had been rejected by the Court of Appeal, Paris vide judgment
dated 14.09.2021 which has not been challenged any further, NHA
asserts that Courts in Pakistan have concurrent jurisdiction to entertain
a challenge to a foreign arbitral award. Learned counsel for NHA
asserted that since the parties had agreed for the Contract, in which
the arbitration clause was embedded, to be governed in accordance
with the Pakistan law, the Courts in Pakistan would be considered as
the “competent authority” having jurisdiction to set-aside the award
dated 30.06.2019. He takes the position that even though the seat of
arbitration was Paris, France, NHA could file an application under
Sections 30 and 33 of the 1940 Act before the Courts in Pakistan
seeking the setting aside of the award dated 30.06.2019 since under
Article V(1)(e), the Courts of the country “under the law of which” the
award was made had the jurisdiction to adjudicate upon the validity of
the award. He justifies filing the said application before the District
Court, Islamabad by asserting that there is no provision either in the
2011 Act or the NY Convention vesting jurisdiction in the High Court to
set-aside a foreign arbitral award.
48. We cannot bring ourselves to agree with the learned counsel for
NHA. Although the proper law of the Contract as well as the arbitration
agreement was Pakistan law, the conduct of the arbitration
proceedings was not to be governed by the proper law of the Contract
or the arbitration agreement but by the lex arbitri or the curial law
which in this case was French law. This is because the seat of the
arbitration between NHA and CWE was Paris, France and therefore a
challenge to the validity of the award dated 30.06.2019 lay before the
“competent authority” of the country under the law of which the award
was made. The word “law” employed in Article V(1)(e) of the NY
Convention refers to the lex arbitri or curial law i.e. the law of the seat of
 20 Execution Application No.9/2019

arbitration and not the proper law governing the Contract or the
arbitration agreement. Since the seat of arbitration is admittedly Paris,
France, it is French law which is to be considered as the law under
which the award was made and not Pakistan law, which governs the
substantive contract between the parties as well as the arbitration
agreement embedded therein.
49. It is pertinent to quote the following extract from the Guide on the
Convention on the Recognition and Enforcement of the Foreign Arbitral
Awards (“UNCITRAL Guide”) published by the UNCITRAL Secretariat:-
“23. Although the Convention does not provide guidance as to the
meaning of the expression “under the law of which”, with very few
exceptions, courts have generally rejected arguments that these terms
referred to the law applicable to the merits. Courts have decided that it
referred instead to the procedural law governing the arbitration, in the
rare situation where the parties have selected a law to govern the
arbitration that is different from the law of the place of arbitration. In
Steel Corporation of the Philippines v. International Steel Services, a
United State District Court held that this expression “refers to the
theoretical case that on the basis of an agreement of the parties the
award is governed by an arbitration law which is different from the
arbitration law of the country in which the award was made”. In this
case the place of the arbitration was Singapore, but the arbitration
clause specified that “[t]he validity, performance and enforcement of
this contract shall be governed by Philippine law”. The respondent
contended that the award had been made under the law of the
Philippines and that, because it had filed a petition to vacate the award
in the Philippines courts, the award should not be recognized under
article V(1)(e). The court held that “while it would be rare for the parties
to choose a procedural law different from the arbitral situs, if they do,
the selection must be clear”, which it considered was not the case
here. In Karaha Bodas, the High Court of Hong Kong similarly stated
that the reference to the law under which the award was made
“undoubtedly refers to the law which governed the procedural law of
the arbitration, not the substantive law of the contract.”

50. In the case of Bharat Aluminum Co. Vs. Kaiser Aluminum

Technical Service Inc. (AIR 2012 SC (Supp) 44), after referring to a
catena of case law and treatises including Redfern and Hunter, the
Indian Supreme Court held that the expression “under the law” in
Article V(1)(e) of the NY Convention refers to the procedural law of the
arbitration and not the law governing the arbitration agreement or the
substantive contract containing the arbitration agreement. In this
regard, paragraphs 147 and 148 of the said report are reproduced
herein below:-
“147. The expression “under the law” has also generated a great deal of
controversy as to whether it applies to “the law governing the
 21 Execution Application No.9/2019

substantive contract” or “the law governing the arbitration agreement”

or limited only to the procedural laws of the country in which the award
is made.
148. The consistent view of the international commentators seems to be
that the “second alternative” refers to the procedural law of the
arbitration rather than “law governing the arbitration agreement” or
“underlying contract”. This is even otherwise evident from the phrase
“under the law, that award was made”, which refers to the process of
making the award (i.e., the arbitration proceeding), rather than to the
formation or validity of the arbitration agreement.”

51. In paragraph 157 of the said report, it was reiterated that the
expression “under the law” refers only to the procedural law / curial law
of the country in which the award was made and that it has no reference
to the substantive law of the contract between the parties. The said
conclusion was arrived at on the basis of the law laid down in the cases
of (i) Karaha Bodas Co. LLC Vs. Perusahaan Pertambangan Minyak Dan
Gas Bumi Negara (335 F 3d 357), (ii) Karaha Bodas Co. LLC (Cayman
Islands) Vs. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara –
Pertamina (Indonesia) (Yearbook Comm. Arb‟n Vol.XXVIII (2003) Page
752), (iii) International Electric Corporation Vs. Bridas Sociedad
Anonima Petroleva, Industrial Y Commercial (745 F Supp, 178 SDNY
1990), and (iv) International Standard Electric Corp. (US) Vs. Bridas
Sociedad Anonima Petrolera (Argentina) ((1992) VII Ybk Comm Arb
639).
52. As mentioned above, the procedural law of the arbitration (as
distinguished from the proper law of the Contract or law applicable to
the arbitration agreement) is the law of the seat of arbitration unless the
parties explicitly agree otherwise. It is very rare for the parties to agree
to the curial / procedural law governing the arbitration proceedings to
be the law of a country other than the law of the country where the
arbitration is seated. But it is permissible for the parties to agree for the
curial / procedural law governing the arbitration proceedings to be
different from the law of the seat of arbitration. This is because Article
V(1)(e) gives a party aggrieved by an award to seek its setting aside
before “a competent authority of the country in which, or under the law
of which [the] award was made.” Only in those cases in which the
parties agree for the curial / procedural law governing the arbitration
proceedings to be different from the law of the seat of arbitration that
 22 Execution Application No.9/2019

the courts of the country under the law of which the proceedings were
conducted will have the jurisdiction to suspend or set aside an award.
53. Had NHA and CWE agreed for the procedural law of the
arbitration to be Pakistan law and not the law of the seat of arbitration,
only then could it be argued that Courts in Pakistan, being the
“competent authority” of the country “under the law of which” the
award was made, have jurisdiction to set-aside or suspend the award.
Even in such a situation, a Court other than the High Court would not be
vested with the jurisdiction to adjudicate upon an application for the
setting aside or suspending of an award. This is because Section 3(1) of
the 2011 Act vests the High Court with exclusive jurisdiction to
adjudicate and settle matters relating to or arising from the said Act.
Since the 2011 Act accords statutory recognition to the provisions of
the NY Convention, and since Article V(1)(e) thereof read with Section 7
of the said Act prevents the High Court from recognizing or enforcing
an award which has been set-aside or suspended by a “competent
authority,” an application seeking the setting aside or suspension of an
award will a fortiori be a matter relating to or arising from the 2011 Act,
and therefore within the exclusive jurisdictional domain of the High
Court. Proceedings for the setting aside or suspension of a foreign
arbitral award before a Court in Pakistan other than the High Court
where the parties agree for the procedural law of arbitration to be
Pakistan law would be coram non judice and a decision to set-aside or
suspend such an award by a court other than the High Court would be a
nullity.
54. The learned counsel for NHA had requested for these
proceedings to be adjourned sine die until the decision of the District
Court, Islamabad on the application under Sections 30 and 33 of the
1940 Act. The grant of such request would ipso facto amount to
recognizing that the District Court, Islamabad had the jurisdiction to
adjudicate upon the application for the setting aside of the award dated
30.06.2019. We have already held that since the procedural law of the
arbitration between NHA and CWE was not Pakistan law, such an
application was not maintainable before the District Court, Islamabad.
In the case of Louis Dreyfus Commodities Suisse S.A. Vs. Acro Textile
Mills Ltd. (PLD 2018 Lahore 597), the Hon‟ble Lahore High Court held
 23 Execution Application No.9/2019

that the 2011 Act and the NY Convention do not countenance a two-tier
adjudicative process, and that the policy and purpose of law will suffer
grievously if such an interpretation was allowed to be weighed with the
Courts. Additionally, in the case of Orient Power Co. (Private) Ltd. Vs.
Sui Northern Gas Pipelines Ltd. (supra), the Hon'ble Lahore High Court
held that it would be totally impractical to allow one party to seek
enforcement of a foreign arbitral award before a High Court and the
other party to file objections against the same award before a Civil
Court. Therefore, there is no reason for the proceedings before this
Court to be adjourned.
55. As NHA and CWE had admittedly not agreed for the procedural
law of the arbitration to be Pakistan law, Courts in Pakistan, including
the High Court, would not have jurisdiction to entertain or decide an
application seeking the setting aside or suspension of the award dated
30.06.2019. This does not mean that the party aggrieved by the said
award is left without a remedy. The procedural law of the arbitration
between NHA and CWE was the law of the seat of arbitration. The law of
the seat of arbitration is admittedly French law. Therefore, NHA could
only apply for setting aside or suspension of the said award before
French Courts, and cognizant of its entitlements under the law and the
NY Convention, it did challenge the said award before the Court of
Appeal, Paris albeit without success. Having failed before the Court of
Appeal, Paris, NHA wanted to take a second shot at challenging the
award dated 30.06.2019 before the District Court, Islamabad. Although
we agree with the decision of the learned District Judge to dismiss
NHA‟s application filed under Sections 30 and 33 of the 1940 Act on the
ground that the High Court had exclusive jurisdiction in the matter
pursuant to Section 3(1) of the 2011 Act, we feel the need to observe
that in this case where the procedural law of the arbitration between
NHA and CWE was to be the law of the seat of arbitration, it was neither
the District Court, Islamabad nor this Court which could entertain the
application for the setting aside of the said award.

Whether a foreign arbitral award cannot be enforced unless a decree in

terms of the award is issued:-

56. An objection taken most vociferously by the learned counsel for

NHA to CWE‟s application for the recognition and enforcement of the
 24 Execution Application No.9/2019

award dated 30.06.2019 was that the said application could not have
been filed unless and until a decree had been issued by a Court of
competent jurisdiction in terms of the arbitration award. He submitted
that in Pakistan, it is only a decree that is executed and not an award
which has not been made a rule of court.
57. There is no requirement under the provisions of either the 2011
Act or the NY Convention for a decree to be issued in terms of the
award, either by a Court of the country in which the arbitration was
conducted and the award was rendered or the Courts of the country
where the award is sought to be enforced, before an application under
Section 6 of the 2011 Act is filed.
58. In the realm of arbitration laws in Pakistan, Section 17 of the 1940
Act requires a Court, as defined in Section 2(c) of the said Act, to
pronounce a judgment according to the award and upon judgment so
pronounced, a decree is to follow. The 2011 Act is a self-contained code
in which the provisions of the 1940 Act cannot be read into. The
operation of Section 6 of the 2011 Act is not preconditioned on the
issuance of a decree in terms of the foreign arbitral award. Although
Section 3(3)(a) of the 2011 Act provides that in exercise of its
jurisdiction, the Court shall follow the procedure as nearly as may be
provided for in the C.P.C., this provision cannot be interpreted such as
to thwart proceedings before this Court pursuant to Section 6 of the
2011 Act simply on the ground that a decree in terms of the foreign
arbitral award had not been issued. Be that as it may, the Hon'ble
Lahore High Court in the case of POSCO International Corporation Vs.
Rikans International (PLD 2023 Lahore 116), while recognizing a foreign
arbitral award, held that the award shall be executed as a decree of the
said Court and ordered for a decree sheet to be drawn accordingly.
Additionally, in the case of Louis Dreyfus Commodities Suisse S.A. Vs.
Acro Textiles Mills Ltd. (PLD 2018 Lahore 597), the Hon'ble Lahore High
Court, while recognizing a foreign arbitral award, granted a judgment in
favour of the award holder in the amount represented in the award
which was ordered to be executed as a decree of the said Court. We,
however, do not think that there is any need to issue an order for the
drawing up of a decree in terms of a foreign arbitral award since the
provisions of the 2011 Act contain no such requirement. Indeed, the
 25 Execution Application No.9/2019

order through which recognition is accorded by the High Court to a

foreign arbitral award is to be executed just like a decree is executed by
a Court of civil causes.
59. The mere fact that in terms of Section 3(3)(a) of the 2011 Act, this
Court is to follow the procedure “as nearly as may be” provided for in
the C.P.C. does not mean that the application under Section 6 is to
proceed strictly like a suit or that an order for the recognition of a
foreign arbitral award is to be accompanied or followed by a decree.
The expression “as nearly as may be” makes it permissible for this
Court to deviate from the procedural requirements in the C.P.C. In the
case of Mehmood-ul-Hassan Babar Khan Vs. Liaqat Ali Kareem (2002
YLR 2227), the Hon‟ble Lahore High Court, while interpreting Rule 76(1)
of the Punjab Local Government Elections Rules, 2000, which provided
inter alia that every election petition shall be tried “as nearly as may be”
in accordance with the procedure for the trial of suits under the C.P.C.,
held as follows:-
“From bare perusal of the abovesaid rule it is crystal clear that the
election petition has to be tried as nearly as may be in accordance with
the procedure for the trial of suits under the Code of Civil Procedure,
1908. Therefore, the C.P.C. is not applicable with all four corners and is
applicable „as nearly as may be‟. These wording shows that the
Election Tribunal can adopt any procedure to conclude the election
petition without following the Civil Procedure Code stricto senso. I am
in agreement with the arguments of the learned counsel for
respondents Nos.1 and 2 that in election petition the Procedure of Civil
Code may be used preferably and Supreme Court had held that C.P.C.
is not applicable in stricto senso. I am fortified by the view taken by this
Court in case Cooperative Bank, Haripur v. Tahir Mehmood (1999 MLD
2074). The learned Counsel for respondents Nos.1 and 2 has referred
to Bashir Ahmad v. District Judge, Malakand and others (1985 SCMR
533) to substantiate the said view.
From the perusal of these cases it has become crystal clear that C.P.C.
though is applicable but is not strictly applicable and the Election
Tribunal can decide the election petition by following C.P.C. as nearly
as possible. Therefore, non-framing of issues is not an irregularity and
contrary to the procedure to be adopted by the Election Tribunal.”

60. Additionally, in the case of Farooq Ahmed Sheikh Vs. Privatization

Commission (2006 CLD 1130), the Hon‟ble Lahore High Court held as
follows:-
“24. At this point we would like to say a few words about the
procedure which we have adopted in deciding this appeal. Section 29
of the Privatization Commission Ordinance, 2000 requires the High
Court to “follow the procedure, as nearly as possible as provided in the
Code of Civil Procedure”. It is important to bear in mind that the C.P.C.
itself is not made applicable to suits filed under the Privatization
 26 Execution Application No.9/2019

Commission Ordinance. Where the relevant facts are not in dispute, as

in the present case, the Court merely has to apply the law to such facts
and render its decision. There is no need, in such case, to call for
evidence and to embark on a regular trial.”

61. Had the Legislature required a decree to be passed in terms of a

foreign arbitral award before the initiation of enforcement proceedings,
it would have unequivocally provided for this in the 2011 Act. The
Arbitration (Protocol and Convention) Act, 1937 (“the 1937 Act”) was
enacted to enforce the Protocol on Arbitration Clauses and the
Convention on the Execution of Foreign Arbitral Awards commonly
known as the Geneva Convention, 1927. The 1937 Act has been
repealed by the 2011 Act. Section 6(1) of the 1937 Act provided that
where the Court is satisfied that the foreign award is enforceable under
the said Act, the Court shall order the award to be filed and shall
proceed to pronounce judgment according to the award, whereas
Section 6(2) of the said Act provided that upon the judgment so
pronounced, a decree shall follow, and no appeal shall lie from such
decree except insofar as the decree is in excess of or not in accordance
with the award. Since unlike Section 6(2) of the 1937 Act, there is no
provision in the 2011 Act which requires this Court to issue a decree
while recognizing a foreign arbitral award, we find no force in the
contention made on behalf of NHA that unless a decree is issued in
terms of the award dated 30.06.2019, the same cannot be enforced.
62. As long as a Court‟s edict is formally expressed in precise and
deliberate language so as to facilitate its execution, it matters not
whether it is enunciated through an order, judgment or a decree. An
order of the High Court for the recognition of a foreign arbitral award is
as good as a judgment in terms of such award. And once this is done,
orders for the enforcement of such award would ensue. The long and
short of it is that since the provisions of the 2011 Act do not require a
decree to be issued in terms of the award but only for recognition to be
accorded to the award, the enforcement of the award recognized by the
Court cannot be pre-conditioned on a decree.

Whether the foreign arbitral award could be challenged on merits

before Courts in PAKISTAN:-
63. Learned counsel for NHA had also submitted that the award dated
30.06.2019 was based on wrong findings of facts; biased appreciation
 27 Execution Application No.9/2019

of evidence; prejudicial misuse of evidentiary procedure; and unlawful

application of law and provisions of the contract. It was also asserted
that the arbitration proceedings had been delayed resulting in the
imposition of interest due to no fault of NHA. In order to cause this
Court to refuse recognition of the award dated 30.06.2019, NHA
agitates the said grounds through the avenue of Article V(1)(d) of the NY
Convention which provides that recognition and enforcement of the
award can be refused where it is shown that the arbitral procedure
adopted by the arbitrator was not in accordance with the agreement of
the parties, or failing such agreement, was not in accordance with the
law of the country where the arbitration took place.
64. To amplify these grounds, NHA asserts that the Arbitrator had
delayed the proceedings which showed his apparent and / or actual
bias and which resulted in the enhancement of CWE‟s claims and the
strengthening of its case. NHA is dissatisfied with the manner in which
the Arbitrator dealt with the evidence adduced by the parties. In
particular, NHA has voiced its grievance against the permission
granted by the Arbitrator to CWE to adduce additional evidence; CWE‟s
application for the issuance of a revised timetable for the production of
expert witnesses being allowed by the Arbitrator; CWE‟s application for
the amendment of its statement of claim being allowed by the
Arbitrator. NHA, in its written arguments, has also re-agitated the
grounds that already stand rejected by the Court of Appeal, Paris. NHA,
in its written arguments, has also referred to the testimony of its
witnesses and how it has been dealt with by the Arbitrator. The
transcripts of the witnesses‟ cross-examination have also been
reproduced in NHA‟s written arguments. NHA has accused the
Arbitrator of allowing CWE to ask leading questions during the
recording of CWE‟s witnesses‟ re-examination and also relying on
hearsay evidence. NHA also accused the Arbitrator of misinterpreting
clause 20.6 of the GCC. None of these grounds are the ones envisaged
by Article V of the NY Convention for refusing to recognize and enforce
an award.
65. The UNCITRAL Guide explains that courts allow arbitral tribunals
significant discretion to establish procedural rules and control their
implementation. In the case of Oberlandesgericht, a German Court
 28 Execution Application No.9/2019

found no breach of due process when an arbitral tribunal refused

applications to submit evidence.1 In the case of Century Indemnity
Company et al. Vs. Axa Belgium (11 Civ. 7263 (JMF)), the United States
District Court for the Southern District of New York found no breach of
due process when an arbitral tribunal imposed the United States
Federal Rules of Civil Procedure on an arbitration at the last minute. It
was held that arbitrators have broad discretion to determine arbitral
procedure and noted that they had, in that case, referred to the said
Rules for guidance.
66. The preamble to the 2011 Act shows that the said Act was
enacted because the legislature considered it expedient to provide for
the recognition and enforcement of arbitration agreements and foreign
arbitral awards pursuant to the NY Convention (to which Pakistan was a
signatory) and matters connected therewith. Section 8 of the said Act
provides that in the event of any inconsistency between the said Act
and the NY Convention, the latter shall prevail to the extent of the
inconsistency. This Section, in my view, not just incorporates by
reference the provisions of the NY Convention as part of the said Act
but also gives it primacy over the provisions of the said Act where there
is inconsistency between the two. Where an application is filed before
the High Court under Section 6 of the 2011 Act seeking the recognition
and enforcement of a foreign arbitral award, such application can be
refused only if the Court comes to the conclusion that the conditions for
refusing to recognize and enforce an award set out in Article V of the
NY Convention are satisfied. We say so because Section 7 of the 2011
Act provides that recognition and enforcement of a foreign arbitral
award shall not be refused except in accordance with Article V of the
NY Convention.
67. Redfern and Hunter (Sixth Edition) explains that the grounds for
refusing recognition and enforcement of arbitral awards should be
applied restrictively and the grounds for such refusal have to be
construed narrowly. We have read and re-read NHA‟s reply to CWE‟s
application under Section 6 of the 2011 Act as well as NHA‟s written
arguments and have not found any reference to the terms of reference

1
Oberlandesgeriht [OLG], Celle, Germany, 31 May 2007, 8 Sch 06/06
 29 Execution Application No.9/2019

(to which the parties had agreed) or any provision of the French law
(being the curial law under which the award was made) which had been
violated by the Arbitrator while proceeding with the reference.
68. As per the UNCITRAL Guide, Article V(1)(d) expressly affirms the
supremacy of the parties‟ agreement concerning the composition of the
Tribunal and arbitral procedure, and that the law of the place of
arbitration should apply only failing such agreement; and the
application of the law by a Tribunal goes to the actual merits of the
dispute and therefore falls outside the scope of review at the
recognition and enforcement stage.
69. The NY Convention does not permit any review of the merits of the
award to which it applies. The grounds on which recognition and
enforcement of a foreign arbitral award can be refused are exhaustively
set out in Article V of the NY Convention. Even in cases where any of
these grounds are satisfied, the High Court may nevertheless proceed
to recognize and enforce the award. This is because the use of the word
“may” in Articles V(1) and (2) makes the refusal to recognize and
enforce an award permissive and not mandatory. It is by now well
settled that the grounds on which the recognition and enforcement of
an award can be refused under Article V of the NY Convention do not
include an erroneous decision in law or in fact by the Arbitral Tribunal.
This Court, while deciding an application under Section 6 of the 2011
Act, ought not to review the merits of the Arbitral Tribunal‟s decision.
Reference in this regard may be made to the following case law:-
(i) In the case of Jess Smith and Sons Cotton LCC Vs. DS
Industries (2019 CLD 23), the Hon‟ble Lahore High Court inter alia
held as follows:-
“The scope of inquiry before the Court before whom the
application for enforcement of the foreign award is pending is
circumscribed by the condition for refusal set out in clause (a) to
(e) of Article V. It is not open to a party seeking to resist a foreign
award to assail the award on merits or because a mistake of fact
or law has been committed by the Arbitral Tribunal.”

(ii) In the case of M/s Tradhol International SA Sociedad

Unipersonal Vs. M/s Shakarganj Limited (2023 CLD 819), the
Hon‟ble Lahore High Court held that “Courts should apply a
narrow standard of review when considering applications for
 30 Execution Application No.9/2019

recognition and enforcement of foreign arbitral awards,” and that

this standard requires Courts to limit their review to procedural
matters and to refrain from re-examining the substance of the
dispute.
(iii) In the case of Yusuf Ahmed Alghanim & Sons, W.LL Vs. Toys
“R” Us, Inc. (XXIII Y.B. COM. ARB. 1058 (1998)), the Court of
Appeals, Second Circuit, United States of America held that
“there is now considerable case law holding that, in an action to
confirm an award rendered in, or under the law of, a foreign
jurisdiction, the grounds for relief enumerated in Art.V of the
Convention are the only grounds available for setting aside an
arbitral award.”
70. Section 7(1) of the 1937 Act set out five conditions that had to be
satisfied before a foreign award could be enforced, whereas Section
7(2) set out the circumstances where a foreign award could not be
enforced. The Hon‟ble High Court of Sindh in the case of Noble
Chartering Inc. Vs. Awan Trading Co. (Pvt.) Ltd. (PLD 2012 Sindh 114),
held that the Court, while deciding an application for the enforcement of
a foreign arbitral award, does not sit as an appellate Court with the
power to re-examine and re-appraise evidence and other material and
would only confine itself to examining the final award within the
parameters of the provisions of the 1937 Act. Additionally, the said
Court in the case of A. Meredith Jones & Co. Vs. Usman Textile Mills Ltd.
(2002 CLD 1121), while deciding an application filed under Section 5 of
the 1937 Act for the enforcement of a foreign arbitral award, gave the
following view regarding the scope of the proceedings:-
“Once the award is made, it in fact amounts to a foreign judgment and
the proceeding before this Court are merely for affirmation of award or
otherwise. Only limited objections as to the validity and enforceability of
the foreign award are permitted under section 7(2) of the Act of 1937 as
discussed above. This Court does not sit over the Foreign Award as a
Court of appeal nor will scrutinize or examine the quality of evidence
before the Foreign Arbitrator, therefore, entire matter cannot be
allowed to be reopened by calling for any additional evidence or
documents not required under the law, this Court in fact acts like an
executing Court and cannot go beyond the award, save as expressly
provided for under section 7(2) of the Act of 1937, that too, for a limited,
purpose to enable the defendant to question the award on merits before
the competent forum in the country of origin.”
 31 Execution Application No.9/2019

71. Even under the 2011 Act this Court, while deciding an application
under Section 6 of the said Act, does not sit as an appellate Court with
the power to re-examine and re-appraise evidence. A foreign award is
to be examined within the parameters set out in Article V of the NY
Convention read with Section 7 of the 2011 Act.
72. The Arbitrator turned down NHA‟s counterclaim made on the
ground that CWE had not completed the works on time. The Arbitrator
did so for the reason that CWE had completed the works within the
extended time for completion. It is not disputed that the Engineer had
been appointed by NHA and that the Dispute Board was appointed with
the consent of the parties. The Dispute Board had been appointed to
hear and decide the disputes between the parties. The Arbitrator did
not find NHA‟s effort to impugn the decisions taken by the Dispute
Board to be supported by any evidence. The Arbitrator treated NHA‟s
allegation that the Dispute Board incorrectly appraised the evidence or
had made a mistake at law to be bare statements aimed at persuading
the Arbitrator by words alone that the Dispute Board had acted
incorrectly or that its decisions should be set-aside.
73. The allegation of bias made by NHA against the Arbitrator has
already been spurned by the Court of Appeal, Paris. Since the judgment
dated 14.09.2021 passed by the Court of Appeal, Paris had attained
finality, NHA could not re-agitate the very same grounds that it had
taken in its appeal before the Court of Appeal, Paris in the objections to
CWE‟s application under Section 6 of the 2011 Act. Recently, the Privy
Council in the case of Gol Linhas Aereas SA v Matlin Patterson Global
Opportunities Partners (Cayman) II LP and others [2022] UKPC 21 held
that where an annulment action at the seat of arbitration involves an
independent or de novo determination of a question, the decision of a
court of competent jurisdiction at the seat of arbitration shall give rise
to an issue of estoppel on that question. Since before this Court NHA
raised the same question regarding the Arbitrator‟s bias which it had
raised before the Court of Appeal, Paris which had made a decision on
the merits after hearing the contesting parties, NHA is estopped from
raising the same question before this court in its effort to resist the
recognition and enforcement of the final award dated 30.06.2019.
 32 Execution Application No.9/2019

74. As regards NHA‟s complaint that the Arbitrator had taken too long
to render the award, suffice it to say that in international arbitrations it
is commonplace for arbitral tribunals to render awards beyond the
period initially fixed for such purpose. In the instant case, the terms of
reference were originally framed by the Arbitrator on 06.09.2015, and
the final award was rendered on 30.06.2019. It may also be mentioned
that on 06.07.2016, the Arbitrator had rendered an interim award. The
closing submissions were submitted to the Arbitrator by the contesting
parties on 21.08.2018 and extensions in rendering the award had duly
been granted by the Court of Arbitration of ICC under Article 30 of the
ICC Rules. The period consumed in the arbitration proceedings, in our
view, was not unduly long and even otherwise furnishes no ground for
refusing to recognize or enforce the award under Article V(1)(d) of the
NY Convention.
75. NHA has also expressed its anguish over the pre-award interest
imposed on it. NHA has also complained about the accumulation of
interest that it has to pay under the award to CWE due to the delay
occasioned in the arbitration proceedings. It is not NHA‟s plea that it
was willing to make payment against CWE‟s claims regarding costs
associated with EOT-1 to EOT-3 on time or that it was due to the
arbitration proceedings or the proceedings before this Court that it was
unable to do so. Other than making a partial payment against CWE‟s
claim regarding costs associated with EOT-1, NHA has at all material
times resisted CWE‟s claims. Had NHA made payment to CWE when the
claims were made, it would have averted the burden of the interest
imposed on it. NHA knew or ought to have known that delay in making
payment against CWE‟s claims would entail simple interest at the rate of
6% per annum in terms of clause 14.8 of the PCC. In the case of
Shipowner Vs. Time Charterer, Oberlandesgericht (6 Sch 3/98, XXV Y.B.
COM. ARB. 641 (2000)), the Hamburg Court of Appeal rejected a
challenge to enforcement under article V(1)(c) made on the basis that
the arbitral tribunal had awarded more interest than had been claimed,
considering that an “arbitral tribunal can in its discretion and on its own
initiative award interest and compound interest for the time until the
rendition of the award and for the time after the rendition of the award.”
 33 Execution Application No.9/2019

76. This Court has discerned from the record that NHA had resisted
making payment to CWE in terms of the concurrent decisions of the
Engineer, the Dispute Board and the Arbitrator regarding CWE‟s claim
for costs associated with EOT-1 and the decision of the Arbitrator
regarding CWE‟s claim for costs associated with EOT-2 and EOT-3. Had
these payments been made on time, NHA would not have found itself in
the unsavory situation of being burdened with interest at the rate of 6%
per annum on the sum that it was liable to pay to CWE. As regards
CWE‟s claims associated with EOT-2 and EOT-3, after the Dispute
Board decided that the Engineer ought to determine these claims in the
same manner as he had determined CWE‟s claims with respect to EOT-
1, NHA did not issue any notice of dissatisfaction regarding the Dispute
Board‟s said decision. At no material stage did the Engineer award any
amount in CWE‟s favour regarding its claims associated with EOT-2 and
EOT-3. This gave the Arbitrator the authority to determine these claims
on the same parameters as the Engineer had determined CWE‟s claims
associated with EOT-1. The record does not indicate NHA‟s inclination
to make payments to CWE in accordance with the award. It tried to
impeach the award before the Court of Appeal, Paris as well as the
District Court, Islamabad but was not successful before either forum.
We do recall that on one of the dates of the hearing, i.e., 16.12.2021,
learned counsel for the parties had sought an adjournment to explore
the avenue of an out of Court settlement but no settlement ever took
place. NHA ought to realize that its policy of challenging with impunity
before different fora every order for payment of money to contractors
causes an enhancement in its liability which is ultimately to be met by
the taxpayer. This case is one such unfortunate example.
77. Against CWE‟s claim for costs associated with EOT-1, the Dispute
Board had awarded Rs.744,068,695/-. In partial implementation of the
Dispute Board‟s said decision, NHA paid Rs.338,000,000/- to CWE.
NHA, in its letter dated 28.11.2014, had required CWE to furnish a bank
guarantee to secure the repayment of the said amount. CWE provided
bank guarantee No.IGT087400000315, dated 06.01.2015 furnished by
Habib Bank Limited for an amount of Rs.338,000,000/- in favour of NHA.
It is an admitted position that no agreement had been executed
between the parties to the effect that with the payment of
 34 Execution Application No.9/2019

Rs.338,000,000/- to CWE, NHA‟s liability to pay Rs.744,068,695/- stood

discharged.
78. The Dispute Board‟s decision on CWE‟s claim for costs
associated with EOT-1 was for a liquidated sum which had to be paid by
NHA along with interest. The said decision was not conditional on any
guarantee being furnished by CWE in favour of NHA. CWE may well
have been driven by commercial considerations and the need to
immediately ease its financial difficulties to furnish the bank guarantee
required by NHA but this by no means did away with NHA‟s obligation to
promptly give effect to the Dispute Board‟s decision by paying
Rs.744,068,695/- to CWE.
79. On 06.07.2016, the Arbitrator rendered the interim award
obligating NHA to pay CWE the difference between the sum paid by
NHA in partial compliance with the Dispute Board‟s majority decision
and the amount awarded by the Dispute Board in CWE‟s favour under
that decision. This amount was calculated by the Arbitrator to be
Rs.406,068,695/-. Furthermore, NHA was also held liable to pay simple
interest at the rate of 6% per annum for the period commencing from
18.08.2012 on any unpaid amounts of the delay costs claim as decided
by the Dispute Board in its decision on dispute No.1. In the interim
award, the Arbitrator had turned down CWE‟s request for the release of
the bank guarantee. Since the bank guarantee had not been furnished
prior to the Dispute Board‟s decision dated 19.05.2014, the Arbitrator
took the view that he would be stepping outside his remit if he were to
allow the said request as an interim measure. He, however, expressed
his hope that NHA would resist the temptation of encashing the bank
guarantee “as such an action would strike at the root of [the] Interim
Award and would be disingenuous and contrary to the spirit of
fairness.” Since the validity of the bank guarantee was extended by
CWE from time to time, NHA did not feel the need to encash it.
80. CWE had filed a petition (C.S.No.118/2016) before this Court
under Section 6 of the 2011 Act seeking the recognition and
enforcement of the interim award dated 06.07.2016. Vide judgment
dated 27.09.2023, this Court has recognized the said interim award and
has initiated proceedings for its execution. Now that the Arbitrator has
decided not to interfere with the concurrent decisions of the Engineer
 35 Execution Application No.9/2019

and the Dispute Board to award Rs.744,068,695/- against CWE‟s claim

for costs associated with EOT-1, and since the award dated 30.06.2019
is being accorded recognition by this Court under Section 6 of the 2011
Act, there is no reason for the said guarantee to subsist.

Whether costs could be imposed on NHA by the District Court,

Islamabad:-
81. NHA has taken an exception to the dismissal of its application
under Sections 30 and 33 of the 1940 Act with costs by the District
Court, Islamabad. On behalf of NHA, it was contended that Section 35-C
of C.P.C. had exempted the government and its emanations from the
imposition of costs. In the case of National Highway Authority Vs. Lilley
International (Pvt.) Ltd. (2020 CLC 608), a similar contention made on
behalf of NHA was rejected by the Division Bench of this Court in the
following terms:-
28. While dismissing this appeal with costs, we are mindful of Section
35-C C.P.C. as amended by the Costs of Litigation Act, 2017 which
provides that the Government shall not be liable to costs under
Sections 35, 35-A and 35-B C.P.C. Although by virtue of Rule 3(3) of the
Rules of Business, 1973 read with item No.3 in paragraph 6 of
Schedule-II thereof, the Communications Division has the
administrative control over the National Highway Authority and by
virtue of Rule 4(4) read with item No.16 of Schedule-II of the said Rules,
the “National Highways and Pakistan Motorways Police Department” is
an attached department of the Communications Division, this does not
make the National Highway Authority an adjunct or alter ego of the said
Division and/or the Government. The term “Government” has not been
defined in the Civil Procedure Code, 1908. “Government” has been
defined in Section 3(21) of the General Clauses Act, 1897 to include
both the Federal Government and any Provincial Government. The
National Highway Authority, being a statutory body, cannot be termed
as the “Government”. Since the appellant is a statutory body
established under the provisions of the National Highway Act, 1991 and
therefore does not fall within the meaning of "Government" it cannot be
insulated from the imposition of costs under Section 35 C.P.C.”
82. The said judgment was upheld by the Hon'ble Supreme Court vide
order dated 20.02.2023 passed in civil petition No.599/2020 titled
“National Highway Authority Vs. Lilley International (Pvt.) Ltd.”
Recently, the Hon'ble Supreme Court in the case of National Highway
Authority Vs. M/s Sambu Construction Co. Ltd. (2023 SCMR 1103),
dismissed with punitive costs civil petition No.3676/2020 filed by NHA
against the judgment dated 21.09.2020 passed by this Court in FAO
No.16/2014. Therefore, the contention that costs could not have been
imposed on NHA has no substance.
 36 Execution Application No.9/2019

Whether the suit for declaration etc. instituted by CWE before the
District Court, Islamabad was maintainable:-
83. The final award was rendered on 30.06.2019 and CWE filed the
application under Section 6 of the 2011 Act before this Court on
21.12.2019. In the award dated 30.06.2019, the Arbitrator had ordered
inter alia that the bank guarantee be returned by NHA to CWE without
conditions and that CWE and the bank providing the guarantee are
released from all obligations thereunder.
84. On 18.12.2019, CWE filed a suit before the Court of the learned
Civil Judge, Islamabad and along with it filed an application seeking an
injunction to restrain NHA from encashing the bank guarantee. Vide
order dated 11.01.2021, the learned Civil Court returned the plaint on
the ground that the matter was beyond its pecuniary jurisdiction.
Thereafter, on 19.01.2021, CWE filed the same civil suit before the
District Court, Islamabad. CWE, in its suit, had prayed for a declaration
that NHA is not entitled to withhold or encash the bank guarantee. CWE
had also sought the return and cancellation of the said guarantee. In the
suit, CWE had also pleaded as to how the Arbitrator had dealt with the
issue of the guarantee.
85. The jurisdiction to grant such reliefs was exclusively with the High
Court and not the District Court, Islamabad. The recognition of the
award dated 30.06.2019 would have the effect of the order passed by
the Arbitrator with respect to the guarantee being made a rule of the
Court and enforceable against NHA. CWE could have, along with its
application under Section 6 of the 2011 Act, filed an application under
Order XXXIX, Rules 1 and 2 of C.P.C. and applied for the same very relief
that it had sought in its application for injunction filed along with its civil
suit. This is because Section 3(3)(a) of the 2011 Act provides that this
Court, in exercise of its jurisdiction, shall have the powers vested in the
Civil Court under the C.P.C., which includes the power to grant interim
injunctions. Since Section 3(1) of the 2011 Act provides that
notwithstanding anything contained in any other law for the time being
in force, the Court shall exercise exclusive jurisdiction to adjudicate
upon and settle matters related to or arising from the said Act, and
since “Court” has been defined in Section 2(d) as the High Court and
such other superior court in Pakistan as may be notified by the Federal
 37 Execution Application No.9/2019

Government in the official Gazette, the District Court, Islamabad did not
commit any illegality by dismissing CWE‟s suit on the ground that the
matter lay within the jurisdiction of the High Court.
86. As mentioned above, not a single assertion made by NHA in its
written arguments for resisting the recognition and enforcement of the
award dated 30.06.2019 qualifies as a valid ground under Article V(1)(d)
of NY Convention to be termed as a transgression of the arbitral
procedure agreed between the parties or provided for in the law of the
seat of arbitration.
Relief:-
87. Since we do not find that any of the grounds envisaged by Article
V of the NY Convention for refusing to enforce a foreign arbitral award
to be satisfied in the instant case, the award dated 30.06.2019 is hereby
accorded recognition, and the same shall be executed by this Court as
though it is a decree. For the enforcement of the interim award dated
06.07.2016, which was recognized by this Court vide judgment dated
27.09.2023, separate execution proceedings are pending. In the event
payment is not made by NHA to CWE in accordance with the said
interim award read with the said judgment dated 27.09.2023 NHA, is
directed to pay Rs.3,435,255,571.32, US Dollars 10,703.88, and GB
Pounds 657,704.75 plus US Dollars 161,708.59 as costs of the
arbitration, and Rs.2,160,000/- in respect of legal fees incurred in
Pakistan along with interest at the rate of 6% per annum from the date
of the award till the date of payment. The said amount shall be paid by
the next date of hearing which is fixed for 30.10.2023.
88. Bank guarantee No.IGT087400000315, dated 06.01.2015
furnished by Habib Bank Limited at the instance of CWE for an amount
of Rs.338,000,000/- in favour of NHA is hereby cancelled and CWE is
discharged from all obligations under the said guarantee. The costs
associated with keeping the said guarantee valid after the award dated
30.06.2019 shall also be borne by NHA. The order regarding the
cancellation of the guarantee is being passed as a consequence of
recognition having been accorded to the award dated 30.06.2019.
89. For the reasons given in paragraphs 53 to 55 above, the Appeal
(FAO No.94/2021) filed by NHA is dismissed and so is the appeal
(Regular First Appeal No.881/2021) filed by CWE. NHA shall bear CWE‟s
 38 Execution Application No.9/2019

costs incurred on Execution Application No.09/2019 and FAO

No.94/2021.

(ARBAB MUHAMMAD TAHIR) (MIANGUL HASSAN AURANGZEB)

JUDGE JUDGE

ANNOUNCED IN AN OPEN COURT ON 04/10/2023.

(JUDGE) (JUDGE)

Qamar Khan* APPROVED FOR REPORTING